New Reports Highlight Growth of Donor-Advised Funds and Giving Circles
Even taking into account the Great Recession, we’ve generally seen the numbers, assets, and giving for private and community foundations in the United States continue to rise over the past decade. Over the long term, that growth has been steady and alludes to the staying power of foundations in spite of changing social, economic and political circumstances. However, while foundations have the capacity to make transformative grants in their respective communities, collectively they account for a relatively small share of charitable giving when compared with contributions from individual donors.
Donor-advised funds (DAFs) and giving circles lie somewhere in between foundations and individuals on the giving spectrum and are two of the fastest growing philanthropic vehicles. Two recent studies offer insight into the growth of these giving instruments in the United States.
The 2017 Donor-Advised Fund Report, published by the National Philanthropic Trust, surveys the growth of DAFs in the United States from 2010-2016 and provides an analysis of funds by sponsor type. Data was gathered from over 1,000 organizations that sponsor DAFs, including national charities, community foundations and single-issue charities. In 2016, there were approximately 285,000 individual donor-advised funds across the country – more than three times the number of private foundations. Nearly 44,000 DAFs are housed in organizations within SECF’s 11-state footprint, representing around 15 percent of all donor-advised funds in the country.
The 2017 report offered a glimpse at the growth and concentration of DAFs by state. Massachusetts (82,643), California (38,590) and Pennsylvania (20,819) were home to more than half of all DAFs in the country in 2016 thanks to prominent charities such as Fidelity and Vanguard. Georgia was one of the fastest-growing states for DAFs and ranked fourth nationally with 19,736 funds, slightly ahead of New York (18,481). Georgia’s leading position can be largely attributed to the National Christian Foundation, located in Alpharetta, which houses more than 16,000 donor-advised funds. Within the Southeast region, Florida, North Carolina, Tennessee, and Virginia also host significant numbers of DAFs.
DAFs, by their nature, tend to be smaller in asset size. While they greatly outnumber foundations, giving from donor-advised funds nationally totaled only $16 billion in 2016 (compared with an estimated $59 billion awarded by foundations in the same year). Still, giving through DAFs has more than doubled since 2010 and this rapid growth doesn’t appear to be slowing anytime soon.
The Landscape of Giving Circles/Collective Giving Groups in the U.S. - 2016, written and researched by the Collective Giving Research Group, provides an updated scan of the collective giving landscape in the United States since the last study of the field was published in 2007. The report is the first in a three-part research study that will also investigate the impact of participation in giving circles on donor giving and civic engagement and explore the relationships between giving circles and their host organizations.
The authors of the report identified 1,087 independently run and currently active giving circles, along with 525 giving circle chapters that were part of different related networks and programs. Within the Southeast, Florida and North Carolina had the highest concentrations of giving circles, each with more than 50. The total number of giving circles was found to have more than tripled since the last field scan was published 10 years ago. Indeed, of the 759 giving circles for which the authors could identify a start date, close to half were launched since 2010.
In terms of their impact, the report’s authors estimate that giving circles have engaged at least 150,000 people across every state and have distributed as much as $1.29 billion since their inception. While overall giving has increased, it’s particularly telling that the average donation amount was found to have decreased from $2,809 to $1,312 since 2007. Giving circles have been touted as a mechanism for democratizing philanthropy and this latest data appears to show them becoming even more inclusive at all income levels.
The authors also noted from their survey of giving circles that respondents often provided support for recipient organizations beyond financial contributions. More than half of respondents stated that members participated in organized volunteer activities with grantee organizations, 38 percent provided fundraising support such as making introductions to other potential donors, and 31 percent provided technical support.
This last finding may reveal the true value of giving circles, in that they enable donors to pool not just their funds but also their knowledge, insight, and connections within the community.
Stephen Sherman is SECF's Data & Research Manager.